Economic headwinds buffet once-resilient Sumatran forest-farms

Farmers in Indonesia’s Krui region have long cultivated valuable damar resin trees among typical crops such as coconuts and rice.

These agroforests have for more than a century served as an economic bulwark for local communities against the encroachment of palm oil and timber operations.

Since 2000, however, a fifth of the region’s damar agroforests have been razed for sawmills and oil palm plantations, with land grabs and low resin prices driving the decline.

For more than a century, agroforests in the Sumatran port town of Krui used to be a prime example of how interspersing native tree species among crops could give locals an economic alternative to the ubiquitous oil palm and timber plantations that blanket the island.

Farmers practicing the method typically benefit from multi-crop harvests while at the same time nurturing a more productive and sustainable farming ecosystem. Until the end of the 1990s, Krui’s agroforests were still largely intact amid the spread of timber and oil palm plantations, with most forest-farmers opting to plant the native rainforest tree species damar (Shorea javanica). During that period, less than 5 percent of households reported clearing damar agroforests.

But by 2014, one-fifth of damar agroforests in Krui had been razed to make way for sawmills and oil palm plantations, according to a new study by environmental anthropologist David Gilbert from Stanford University.

In his recentresearch published in the journal Human Ecology, Gilbert said that the single largest cause of agroforest clearing was for oil palm, notably over the last 15 years.

In his paper, “The ‘Capitalist Squeeze’ and the Rise and Fall of Sumatra’s Krui Agroforests,” Gilbert argues that a complex process of state support for logging and agribusiness, inheritance patterns, and emergent inequalities among Krui smallholders have compelled the regions forest-farmers to abandon damar agroforestry over the past decade.

Damar trees in Pahmungan village in Sumatra’s Lampung province.

Krui is located in Lampung province, bounded by the Indian Ocean and Bukit Barisan Selatan National Park. Farmers there have since 1875 cultivated damar trees among their coconut and rice crops. Damar yields a valuable resin that is used in the production of incense, varnish, paint and cosmetics, and these agroforests have long come to be regarded by the Krui forest-farmers as a central component of their identity and heritage. In addition to their economic value, they also conserve soil, water systems and biodiversity.

In recent decades, however, sawmills and oil palm plantations have widened their reach into the Krui area.

PT KCMU was granted a concession that overlapped onto the community lands of the Tenumbang, Ngambur and Bengkunat people, while PT PPL was granted a concession on the land of the Malaya clan. Almost all the land covered by the proposed concessions was already being intensively managed by the coastal communities to cultivate damar, coconuts and rice, according to a 2006 report by local and international NGOs.

Residents feared that the oil palm plantations would destroy their damar trees and gobble up their farmland, according to an environmental impact assessment for the PT KCMU concession that was carried out in 1996. Inevitably, the military-backed dictatorship of Suharto sent in soldiers to force the communities to accept the company’s presence on their land.

After Suharto’s fall in 1998, there was a resurgence in opposition to PT KCMU among the local communities, which rescinded their letters of support for the establishment of the company’s plantations on their lands. “Clearly, those letters had been signed under duress,” the NGO report said.

But the damage was done. The company had already set up a palm oil mill in an area of Krui that was previously damar agroforest, and by 2014 it had cleared a tenth of the historical agroforest area.

“It’s an early case of [a] modern land grab in [the] specific locale of Krui,” Gilbert said. “But we can’t say it’s the whole case.”

From 2000, the local government also began licensing sawmill operations in Krui.

PT PPL, meanwhile, saw its permit revoked following strong resistance from local communities, who allied with activists and researchers.

Economic factors

The arrival of the timber and palm oil operations was not the only driver behind the forest-farmers’ move away from agroforestry.

Gilbert identified other factors, such as declining damar resin prices, fierce local competition, and a power imbalance between smallholders, traders and brokers. He said activists and forest-farmers had failed to address the inequalities in the damar commodity chain, stripping farmers of their bargaining power to determine sales prices.

A recent survey of the commodity chain done by WWF found a wide disparity between the prices at which forest-farmers and major traders were selling damar resin. There is also no union or cooperative for either farmers or small traders in Krui, further weakening their bargaining power.

“It’s difficult to unite them,” WWF Indonesia communications and education officer Hijrah Nasir said in an interview. “The root of the difficulty might be … the competition [between farmers and traders].”

Combined, these factors have made damar agroforestry increasingly unattractive for farmers, who then sell their trees to the timber operations and their land to the palm oil companies whenever an urgent need for money arises.

“Starting from 2010, there’s no land grab,” Gilbert said. “Forest farmers lost their area without being dispossessed. These are individuals making their own decisions.”

The decline of the Krui agroforests has altered the region’s landscape and the people’s livelihoods dramatically, he added.

“It has reduced the biodiversity and reduced the autonomy and freedom [of Krui forest-farmers],” Gilbert said.

Many of the farmers who sold their land to PT KCMU, often for five times what they previously earned in a year, are now out of work, with jobs in the oil palm industry seen as difficult. Some have moved to northern Krui, looking for work in the damar agroforests there, where the farmers have long resisted selling their lands.

“It serves as a lesson for people in northern Krui. They held off from the expansion [of timber and oil palm plantations] because they received a lesson from their southern sisters and brothers,” Gilbert said.

Back to the woods

Gilbert said a renewed coalition, one built on an awareness of all these factors, could encourage Krui forest-farmers to continue to invest in their damar agroforests. The coalition could establish cooperatives, negotiate direct-to-factory sales agreements, and set up savings programs for the farmers.

This might help gird the Krui agroforestry sector against the current economic headwinds, says the WWF’s Nasir.

“If forest-farmers and traders unite as a community [representing] Krui damar agroforestry, they will have high bargaining power in the global market, seeing how Krui holds a monopoly on the damar [resin] in the region,” she said.